When Would I Need More Than One Life Insurance Policy?

Life could be so much simpler if we just needed one of everything. Why do we need more than one shirt, credit card, television, airline company, or burger place? Is it necessary to have more than one of anything?

If everything stays frozen in time, one life policy will work just fine. If you take in all the relevant objectives and create a recipe for that point in time it will remain perfect right up to the point where something changes.

Life Changes That May Require More Than One Policy

Let’s journey with John together and see what this looks like.
As a child, John’s parents want to give him a head start. So they took advantage of the much lower premiums and purchased a “head start” kind of policy to build up some equity for him later in life.
After graduating from college and attending law school John is admitted to the Bar. Now, he needs to begin paying back his substantial student loan and decides to add a second policy to cover the obligation.

Three years later, John and his colleague decided to start their own law firm. The new partners acquire policies to protect their substantial financial commitment to each other.

After another year goes by John finally starts feeling some stability in his future and persuades Susan to marry him. They buy a home and have three children. So John now adds his 4th (who’s counting?) life insurance policy so Susan and the children can stay in the house if he (and his paycheck) are suddenly no longer there.

Ten years after receiving that second policy, a review of his current life insurance portfolio shows that both the value of the business and the family’s standard of living have increased substantially. There’s a lot more value needing to be protected, which brings about a need for policies #5 and #6.

We could go on, but you get the picture. It boils down to this: if John had never done any of these things if he never acquired any debt if no one ever came to be dependent on the revenue he generated for his business or his family, then the first policy his parents took out for him may remain to be just fine. It may have been the only life insurance policy he ever needed.


Independent Policy Review: The insurance world can be difficult to navigate. Without a clear understanding of their current plan, it’s difficult to be certain that your clients have the right coverage. If you’d like to take a closer look, you’ve come to the right place. We can answer your life insurance questions and provide the clarity you need to sleep easy.

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